07 | 12 | 2016

Christmas Campaign Press Release on Damage to the Economy Incurred by Counterfeiting and Piracy

Photo: Customs of the RoC

With the festive season and buying Christmas presents approaching, the European Observatory on Infringements of Intellectual Property Rights at the European Union Intellectual Property Office (EUIPO) published on this occasion once more alerting data on the damage to the economy of the European Union incurred by counterfeiting and piracy. This press release is intended to warn citizens once again of the need to be cautious and to use this information to make more informed choices when doing their Christmas shopping and choosing gifts for their dear ones.

A series of research studies carried out by EUIPO between March 2015 and September 2016 estimates that due to the presence of fake goods in the EU marketplace every year EUR 48 billion or 7.4% of all sales income is lost in nine affected industry sectors, which are: cosmetics and personal care; clothing, footwear and accessories; sports goods, toys and game; jewellery and watches; handbags; recorded music; spirits and wine; and pharmaceuticals. Every year, an additional EUR 35 billion is also lost across the EU economy due to the indirect effects of counterfeiting and piracy in these sectors.

Those lost sales translate into 500 000 jobs directly lost or not created across these sectors in the EU and when the indirect consequences of counterfeits on other sectors are taken into account, an additional 290 000 jobs are lost elsewhere in the EU economy. As to the effect of fakes on public finances, the total yearly loss of government revenue arising from counterfeiting and piracy in these nine sectors is estimated at EUR 14.3 billion, in terms of lost income tax, VAT and excise duties.

The data for the Republic of Croatia show that direct loss incurred as a result of counterfeiting in piracy in the nine sectors identified amounts to € 261 million annually, or 8.9% of the sales of these sectors, with over 4200 jobs directly lost in these sectors. Also, relative lost sales and jobs due to counterfeiting are above the EU average in Croatia, with handbags being the sector most affected by lost sales.

Detailed data on the effects of counterfeiting and piracy in nine affected sectors are available via the following link.